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MovingHow To Realistically Plan For Retirement?

October 11, 2018by was73100

Just the other day, I overheard a very involved conversation between a husband and wife, where they were both afraid that they would never be able to afford to retire. The wife was talking about this man who just passed away, at 89, and she said that she marveled at how someone could live that long, and still be able to maintain the apparently nice life style that this gentleman seemed to live. The longer the conversation continued, the more downbeat and depressed this couple appeared, appearing almost to give up on their own future. What can people do to plan to be able to retire and maintain a fairly reasonable life style?

1. Determine how much it costs you to live today, calculating in housing costs (including utilities, etc.), food, health coverage, reasonable amount of entertainment, a vacation or two per year, etc. For each couple, what is included may vary, because for each, the needs and desires may vary.

2. Now use an actuarial table to determine what a fairly average amount of annual inflation will translate that number to, and instead of basing the need on the dollar amount at age 65, calculate the number of years until you turn 75 instead. As a rule of thumb, remember that at three percent (3%) inflation per year, the amount needed will double in approximately 24 years (the “Rule of 72,” divide 72 by 3). Therefore, if you feel you need $50,000 per year in today’s currency, it would be equivalent to $100,000 in 24 years.

3. Once you determine how much you’ll need to live on, now it is time to start figuring out how to get there. Start with your payment from Social Security. Every year, shortly before your birthday, the Social Security Administration sends you an estimate of what your monthly payment would be based on your contributions to date. If you use that number as your estimate, and multiply it by twelve months, it will give you a conservative way to begin. So, let’s assume that the number that you are working with from Social Security is $1,500 per month. Twelve times that is $18,000 per year. Therefore, begin by subtracting this $18,000 figure from the inflation adjusted $100,000, and you begin your planning seeking an additional $82,000 per year (or slightly under $7,000 per month). So, how can you save enough money to give you that $82,000 annual income?

4. Do you have a pension? Is it already vested? What is the conservative estimate of what it might be paying you per year? Let’s use an estimate of another $1,500 per month or $18,000 for the sake of this example. Subtract that $18,000 and you…


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Source by Richard Brody

Home Removals, Fine art Removals Office relocation

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